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    Computing an Exponentially Smoothing Forecast

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    The manager of the BP Service Station wants to forecast the demand for unleaded gasoline next month so that the proper number of gallons can be ordered from the distributor. The owner has accumulated the following data on demand for unleaded gasoline from sales during the past 10 months.

    Month Gasoline Demanded (gal)
    Oct. 800
    Nov. 725
    Dec. 630
    Jan. 500
    Feb. 645
    Mar. 690
    Apr. 730
    May 810
    June 1,200
    July 980

    a. Compute an exponentially smoothing forecast using an alpha value of .30.
    b. Compute an adjusted exponentially smoothed forecast (alpha = .30 and beta= .20).
    c. Compare the two forecasts using MAPD and indicate which seems to be more accurate.

    Please show all work to help me understand and the computed values of formulas in problems.

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    Solution Summary

    This posting provides a solution in Excel for computing an exponentially smoothing forecast.